1. (C) Summary. Norwegian politicians like to brag about their good relations with Russia, even suggesting that Norway Russia policy should be a model for other neighbors of Russia to follow. This public positivism masks a growing nervousness over developments in Russia and a definite split in Norwegians views on Russia. This angst and Norways unsymmetrical relationship with Russia also has the effect of strengthening the U.S.-Norway bilateral relationship and could be the basis of a future strategic dialogue.

2. (C) Norwegian security, business and environmental leaders are much more skeptical (and worried) about Russian motivations and actions than official statements would suggest. Their viewpoint is mostly held quietly, leaving the public arena primarily to Norways government officials (especially the PM and FM) and think tankers who choose to stress the strong cooperative relationship with Russia and the potential for further cooperation. However, even the most positive acknowledge that relations with Russia are not easy and Norway has purposely maintained a core of Russia experts (particularly in the intelligence and defense fields). Increased Russian military activities, the growing strategic relevance of the Arctic, problems with Norwegian investments in Russia all make it clear that Norways relations with Russia will continue to be one of Norways prime foreign policy considerations. Strongly supporting increased U.S. engagement with Russia, Norway can be convinced to be more supportive in those cases where the U.S. or NATO believe firmness is required...but we must ask. END SUMMARY

Russia: Public Positivism and a Focus on the Bilateral --------------------------------------------- ---------

3. (C) The GONs official Russia policy has been characterized by a consistent stress on the positive and a reluctance to publicly criticize Russia actions (the Georgia war was one exception but the GON shows little public solidarity when Russia pressures the Baltics, Poland or other allies). Norway has chosen to prioritize the bilateral aspects of its relations to Russia, working to achieve greater cooperation in the Barents, defending its interests in a quiet manner and stressing the benefits of greater Russian integration into the European economic and political regimes. The GON works to maintain steady and positive contacts with Russia as evidenced by the recent meetings of PM Stoltenberg with President Medvedev and PM Putin, FM Stoeres meetings with FM Lavrov and other meetings between Ministers of Energy and Industry. (Reftel A and D)

4. (C) As a member of the wider European community, Norway has been much more passive, at times criticizing Russian actions, but primarily arguing for dialogue and inclusion. Norways focus on the bilateral relationship has resulted in cooperative and well-functioning relationships in environmental cleanup, nuclear safety, fisheries management and people-to-people exchanges. It also has led to a greater potential for cooperation in the development of energy resources in the Barents (StatoilHydros share of the Shtockman Development Company is the prime example).

5. (C) These achievements impact the wider relationship as the GON does not want to throw away the hard earned progress in bilateral relations (or damage the potential future cooperation on energy development or agreement on a maritime border) for events elsewhere. GON priorities were illustrated by a recent meeting between the Deputy Foreign Minister and a high-ranking USG official. When speaking about Russia the Deputy Minister choose to focus on a recently concluded fishing agreement with Russia, ignoring any other wider concerns.

6. (C) The GON preference for bilateral issues does not mean that the GON is unaware of negative trends in Russia or that it is completely unwilling to press Russia. Increases in Russian military activity in the area as well as the growing uncertainly regarding investments in the Russian economy (the Telenor investment the most prominent) have made the challenges of working with Russia clear. FM Stoere has said that Norway is concerned about Russian activities but does not want to pick the wrong fights. (Note: A reliance on others to confront Russia when needed is also a clear factor. End Note)

7. (C) The "right fights" for the GON appear to be any issue which has an economic impact on Norway or actions such as the Georgian war where Russia uses force. FM Stoere and PM Stoltenberg both raised the Telenor investment issue with their counterparts at recent meetings and the GON has enforced its fishing laws and its sovereignty over Svalbard despite Russian opposition. Also the GON has been unwilling to accept the Russian position on the maritime border, given that it would exclude Norwegian rights over a sub sea area thought to be rich in energy resources.

8. (C) The general GON policy towards Russia is to increase Norwegian (and other countries) presence in the High North, create new tools to deal with the regions challenges, and increase the level of knowledge about the Barents region within Europe and with allies. The GONs initiative on this front has taken several shapes, including pushing to expand the Arctic Council, proposing a NATO focus on the alliances core areas, increasing Nordic cooperation and activities, and holding bilateral dialogues with the U.S., UK, France, Germany and Canada on High North issues. Norway hopes increased attention to the High North will make it harder for Russia to obtain its objectives on Svalbard or elsewhere in the region with the use or threat of brute force. (Reftel B and C)

Quiet Concerns --------------

9. (C) The GONs strategy of public positivism and increases in international attention to the region is not satisfactory to all in Norway. The leaders of the two biggest opposition parties have criticized the GONs approach as too weak on Russia, especially regarding negative developments in its democracy and economy. They point to the dismissal of the governor of Murmansk, known for his close cooperation with Norway, as evidence that the GONs soft touch has not resulted in any changes in Russian behavior. Security policy experts have always kept a wary eye on Russian activities and remain very concerned about the limited ability of the Norwegian military to respond to any threat. They would like to see increased NATO attention and planning in the region. Environmental and Human Rights leaders in Norway including the influential heads of Bellona (an environmental group with offices in Norway and Russia) and the Helsinki Human Rights Committee have been very critical of Russia and the GONs policy. Business leaders also are becoming more concerned given the problems that even state-owned telecommunications firm Telenor has faced with their investment in Russia. For these disparate groups, the positive rhetoric used by the GON is increasingly not matched by the reality in Russia.

10. (U) These criticisms were echoed by well-known Russian environmental activist Alexander Nikitin in a June 12 speech in Oslo. Nikitin criticized what he called FM Stoeres guiding principle "not to provoke, but to collaborate." Nikitin expressed disappointment that the GON fails to take advantage of its strong positions (not dependent on Russian energy, secure due to NATO) to speak out about Russias democratic failings, the reluctance of Russia to take responsibility for the environment, Russias aggressive behavior in the Arctic, or the overarching control of the Kremlin over local authorities. Nikitin said that local cooperation in the Barents is good but this is an unstable structure on which to base a bilateral relationship. He challenged Norway to ask difficult questions of Russia.

relationship has never been so good. The Norwegian Embassy in Moscow believes that the Kremlin needs to show that it can cooperate with a NATO country and has decided that Norway is the best candidate. Both sides point out the cooperative relationship on fisheries, the visa-free travel border zone, growing border crossings and cultural exchanges and the potential for economic cooperation offshore. The close cooperation that Norway and Russia enjoy is admirable and real.

12. (C) However, Norway has precious little to point to as concrete results of its positive Russia policy:

--The decision to grant StatoilHydro participation in the Shtockman development company is often mentioned as the prime example of how the GON policy pays dividends. However this joint project is only now in the beginning stages of development with the investment decisions to be made later this year. Other foreign energy companies have had similar positive beginnings with joint projects with Gazprom only to see them fall apart later. How this joint project develops will be a key test of the claim that the Norwegian relationship with Russia is somehow better than others.

--The resolution of the Telenor case will be another. Telenor, the GON state owned telecommunications firm invested with the oligarch-controlled Alfa Group to establish a mobile phone company in Russia. After disagreements over the joint companys future, the Alfa Group succeeded in freezing Telenors shares in the company and threatened to sell them at a huge loss to Telenor. This action was raised by all Norwegian Ministers during their recent meetings with Russian counterparts. PM Stoltenberg received promises from PM Putin that the Telenor shares would not be sold before all appeals processes were exhausted. How this case is resolved will be illustrative.

--Svalbard and the Maritime Boundary are also key test cases. Russia disputes Norways interpretation of the Svalbard treaty regarding the exploitation of resources in the waters around Svalbard. At present this primarily involves fish but could in the future include sub sea energy resources. Russia also has a very different interpretation of where the maritime boundary should be drawn. Development of potential energy resources in the disputed area has been put on hold until a border is agree upon. If Russia gives ground on either of these two issues it would be strong evidence of the success of Norways gentle approach.

Comment -------

13. (C) Norway has succeeded in creating a low tension relationship with Russia with real and functioning cooperative agreements in the Barents. This is positive but it is unclear that this is a result of GON policy or simply of Russian disinterest. Some are wondering if this is worth the price of GON reluctance to show solidarity when Russia pushes allies or other states. Despite GON claims that other nations should follow their lead, it appears to us that Norways relationship is unique and a model Russia might favor, but not other allies.

14. (C) Norways underlying concerns over Russia will however continue to be an important piece of the continued close U.S.-Norway bilateral relationship. Close intelligence and military connections have continued despite the end of the cold war, and Norway had maintained its Russian expertise when others scaled back. Norways desire for increased attention to the High North is a healthy impulse and one which should compliment increasing U.S. interest in the Arctic. Norway has expressed a desire to re-start the dormant U.S.-Norway High North talks and discussing ways to combine our Russian expertise may be a topic of mutual interest for this initiative. Norway strongly supports U.S. determination to increase engagement with Russia and "reset" the relationship. We should ask Norway to also support the firm U.S. and NATO positions on Russia when necessary, rather than relying on others to do so. WHITNEY